UAE deal, outlook boost South Korea nuclear power stocks

By IBT Staff Reporter12/27/09 AT 11:48 PM

Shares in state utility KEPCO <015760.KS> and other South Korean nuclear power-related stocks jumped on Monday as a $40 billion deal from the United Arab Emirates boosted prospects for future nuclear plant deals.

A consortium led by Korea Electric Power Corp (KEPCO) won the landmark deal on Sunday to build and operate four nuclear reactors.

Following the deal, KEPCO also said it was in talks with Turkey for two nuclear power reactors and was planning a separate bid for a Ukraine nuclear power plant.

Analysts expect growing demand for nuclear energy and recognition from the UAE deal to help Korean builders, already strong players in refining and other industrial facilities, become leaders in nuclear power projects.

The financial crisis in late 2008 hit power plant projects globally, leading to suspensions and delays in 2009, but a recovery is seen as likely next year, especially in nuclear facilities.

Demand for nuclear power facilities is expected to rise steadily worldwide, and the deal signifies more South Korean consortia will be involved, said Cho Yoon-ho, an analyst at Daishin Securities.

By 0219 GMT, shares in KEPCO were up 7.18 percent to 35,100 won, after briefly rising by the daily limit of 15 percent.

Korea Power Engineering Co Inc <052690.KS> and KR Plant Service & Engineering <051600.KS>, both units of KEPCO that specialize in power plant businesses, also hit limit highs.

Other consortium participants also jumped, with Hyundai Engineering & Construction <000720.KS> rising to as much as 76,900 won, its highest intraday level in more than 18 months. The stock was last up 8.53 percent.